I have the honour to speak on behalf of the European Union. The Acceding Countries Bulgaria and Romania, the Candidate Countries Croatia*, as well as the Countries of the Stabilisation and Association Process and potential candidates Albania, Bosnia and Herzegovina, the Former Yugoslav Republic of Macedonia, and Serbia and Montenegro and the Efta countries Iceland, and Norway, members of the European Economic Area, as well as Moldova, associate themselves with this statement.

The EU has read with care and interest the Director General’s latest report on the implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran (GOV/2005/67) and has listened with equal care and interest to the Director General’s oral report on this subject at the start of this session. We are grateful to the Director General for yet another balanced and objective report. We commend the Director General and the Secretariat for the impartiality and professionalism with which they have pursued investigations into questions arising from Iran’s multiple failures, over an extended period of time, to declare nuclear materials and activities in accordance with its safeguards obligations.

The EU notes that good progress has been made by Iran in correcting the many instances of non-compliance reported to the Board in November 2003. We note also good progress in the Agency’s ability to confirm Iran’s declarations, but that several important questions remain outstanding: in particular, the origin of some of the HEU and the LEU particle contamination found at various locations in Iran, the extent of Iran’s efforts to import, manufacture and use centrifuges of both the P1 and P2 designs, Iranian statements about plutonium research, Iranian activities at the Gchine uranium mine, and Iran’s activities involving polonium.

The EU read with concern a number of passages in the Director General’s report:

The Agency still needs to understand what contacts took place between Iran and intermediaries in the late eighties and early nineties and why P-1 centrifuge design documents similar to those provided in 1987 were delivered again in 1994;

The Agency is still seeking sufficient assurance that no activities related to the P2 centrifuge design were carried out between 1995 and 2002;

The total number of unprocessed irradiated UO2 targets stored in containers turned out to be much higher than the number previously declared by Iran;

The Agency’s request to speak with the individual in charge of the Gchine project prior to 2002 has so far been refused and in documents relating to this project shown to the Agency the names of the persons who had designed, drawn, checked or approved the drawings, and the name of the company that had prepared the drawings, along with project numbers and dates, were blacked out;

The Agency is still trying to acquire a better understanding of why , apparently, no work was carried out at the Gchine site between 1993 and 2000;

The Agency is still awaiting additional information and clarifications from Iran regarding efforts by the Physics Research Centre to acquire dual use materials and equipment that could be used in uranium enrichment or conversion activities, including access to relevant individuals.

The EU also read with concern that the Agency has made a number of other requests for information or access to individuals or locations which have still to be granted. We take a serious view of the Director General’s assessment that full transparency is not only indispensable but overdue, and that, given Iran’s past concealment efforts over many years, such transparency should extend beyond the formal requirements of the Safeguard Agreement and Additional Protocol and include access to individuals, documentation related to procurement, dual use equipment, certain military-owned workshops and research and development locations. We note that the Agency is still not in a position to conclude that there are no undeclared nuclear materials or activities in Iran and that, in view of the past undeclared nature of significant aspects of Iran’s nuclear programme, and its past pattern of concealment, this conclusion can be expected to take longer to arrive at than in normal circumstances.

Finally, Madame Chair, the EU notes that Iran has not heeded the call made by the Board on 11 August for the re-establishment of full suspension of all enrichment related activities; that Iran’s Additional Protocol is still unratified; and that Iran has ignored the Board’s request for reconsideration of its decision to construct a research reactor moderated by heavy water.

These are among the many factors leading the EU to the view that this is an appropriate moment for the Board to take stock.

In November 2003, the Board had before it a report from the Director General which made clear that "Iran had concealed many aspects of its nuclear activities, with resultant breaches of its obligation to comply with the provisions of its Safeguards Agreement". That report also noted that some of the breaches "dealt with the most sensitive aspects of the nuclear fuel cycle, including enrichment and reprocessing". The Board therefore took a number of important decisions. Inter alia, it:

Endorsed the view of the Director General that a policy of full transparency and openness on the part of Iran was indispensable;

Called on Iran to sustain full cooperation with the Agency in implementing Iran’s commitment to full disclosure and unrestricted access;

Underlined that it was essential that the declarations made by Iran in 2003 amounted to the correct, complete and final picture of Iran’s past and present nuclear programme;

Reemphasised the importance of Iran moving swiftly to ratification of the Additional Protocol;

Welcomed Iran’s decision voluntarily to suspend all enrichment-related and reprocessing activities and requested Iran to adhere to that decision in a complete and verifiable manner.

The Board subsequently called on Iran to reconsider its decision to construct a research reactor moderated by heavy water.

What is the situation confronting the Board today, almost two years later?

The Director General has reported that full transparency still has not been forthcoming: he describes it as overdue;

Iran's October 2003 declaration, said by Iran to provide a full picture of its nuclear activities, has turned out to be incomplete - for example, with respect to its P-2 centrifuge activities, with respect to the level of enrichment achieved by it laser enrichment work, and with respect to its plutonium research;

The contamination issue remains unresolved;

Iran’s Additional Protocol remains unratified;

All enrichment related activities in Iran have been suspended for only 8 of the 22 months that have passed since November 2003;

Construction of a research reactor moderated by heavy water has begun and continues.

It is clear that Iran has failed to honour its commitments – commitments which made it possible for the Board to hold back from reporting to the Security Council and others, in November 2003, the non-compliance reported to it by the Secretariat. Iran has not engaged in full cooperation with the IAEA to address and resolve through full transparency all requirements and outstanding issues of the Agency. Having taken over a year to get round to suspending all enrichment-related and reprocessing activities, Iran has, in defiance of clear Board requests, abandoned that suspension well before the resolution by the Agency of all the issues arising from its non-compliance. In this regard may I recall that in the resolution it adopted in November 2004 the Board underlined that the full and sustained implementation of this suspension was essential to addressing outstanding issues.

The EU has sought to create conditions in which the international community can leave it to the Agency to go about its job of providing the necessary assurances in the knowledge that, meanwhile; Iran would not be developing a capability to produce fissile material. The development by Iran of the mostsensitive parts of the fuel cycle has neither an economic nor a technical rationale. We therefore regret, and feel deeply concerned by the fact that Iran gives every sign of being intent on developing a fissile material production capability well before the international community obtains what it needs: confidence that Iran’s programme is exclusively peaceful in nature.

It is that concern which leads us to assert that the Board cannot simply overlook Iran’s failure to fulfil its commitments and its defiance of Board resolutions. The Board must ask itself whether there is anything that can be done at this session to convince on Iran to implement the necessary confidence-building measures and to grant the Agency the full transparency which the Director General described on 19 September as a prerequisite for the Agency to be able to reconstruct the history and nature of all aspects of Iran’s past nuclear activities, and to compensate for the confidence deficit created.

In the EU view there is something that the Board can and should do. The Board should draw the attention of the UN Security Council to the safeguards breaches and failures first reported to the Board in November 2003 and to the questions which have arisen in this connection that are within the competence of the Security Council. This will give the Security Council an opportunity to throw its weight and authority behind the Board’s resolutions. It will give the Security Council an opportunity to endorse the Board’s calls for confidence-building measures, especially full suspension, and for the full transparency which was first promised in October 2003 and which is indispensable to the resolution of outstanding issues and overdue.

Involving the Security Council in this way is not intended to close off diplomacy. On the contrary: it is intended to facilitate it by reinforcing the signal that the international community expects Iran to deliver on its promises of full transparency and full suspension. EU Member States intend to work within the Security Council to ensure a sensible, measured and constructive multilateral approach to the issue. The IAEA will remain seized of the matter and the Secretariat’s responsibility for implementing Iran’s Safeguards Agreement will be unaltered.

Let me close by stressing that the EU recognises the inalienable right of NPT parties to develop research, production and use of nuclear energy for peaceful purposes without discrimination and in conformity with Articles I and II of the NPT. But maintaining the balance between rights and obligations envisaged in the treaty is essential. We believe it is incumbent on a non-compliant state to return to full compliance and to build the necessary confidence in the exclusively peaceful nature of its nuclear activities. In the specific case of Iran the suspension of fissile material production and enrichment-related activities would do just that; it is therefore prudent for the Board and the international community to insist on it.

* Croatia continues to be part of the Stabilisation and Association Pact